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Dollar early strength across the board is being quickly reversed with US opening, amid yesterday’s budget deal: the Congress has reached an agreement to fund federal services which once voted, will avoid another government shutdown early 2014

The EUR/USD is again flirting with 1.3800, having found buyers in the 1.3740 level earlier today. Confined to a tight range, hourly indicators maintain a pretty neutral stance, albeit bullish trend prevails with a price acceleration above 1.3800 favoring a run towards fresh highs beyond 1.3840.

Advanced figures for EUR futures markets from CME Group, open interest rose by 308 contracts on Wednesday from Tuesday’s final 494,154 contracts and volume contracted by more than 7000 contracts.Today’s ECB event should be crucial for the near term price action.

LONDON, July 5 - The euro climbed half a percent to near three-week highs on Thursday following strong German data, though gains were capped before the release of Fed minutes later in the day.

German industrial orders bounced back in May with a stronger-than-expected jump after four consecutive monthly drops, as demand from domestic customers and the rest of the euro zone picked up.Media reports that the European Central Bank may be preparing to raise interest rates by next September or October also helped the euro, though thin volumes were a factor, with U.S. markets shut overnight for Independence Day.“The euro is getting a bit of a lift on the German data though the trade concerns will continue to dominate markets with the Fed minutes being the key data point,” said Kenneth Broux, a currency strategist at Societe Generale in London.In early London trading, the single currency rallied to a high of $1.1711, just shy of a three-week peak of $1.1722.

But with a deadline for Washington to impose tariffs on Chinese imports also due, markets remained rangebound.The offshore yuan was broadly steady at 6.6466 per dollar, some distance from Tuesday’s 11-month low of 6.7344, following reassuring remarks from Yi Gang, governor of the People’s Bank of China (PBOC).“Chinese authorities have been clear they don’t want to use the weaker yuan as a major foreign exchange trade policy... If they were to target a weaker yuan, it could potentially lead to problems, such as capital outflows (as) experienced back in 2015,” said Shinichiro Kadota, senior FX & rates strategist at Barclays in Tokyo.The dollar’s index against six rivals was 0.34 percent lower at 94.34, its lowest level in a week.

While the dollar has been supported by the perception of the relative strength of U.S. economic growth and the attraction of its higher bond yields, some market players say recent falls in those yields may be undermining the currency.The Fed will release minutes of its June meeting, with investors looking for clues on whether it is still on track to raise interest rates twice more this year. Monthly payrolls data follow on Friday.

Euro falls as dollar snaps losing streak after new trade tariffs kick in

The dollar snapped a five-day losing streak and the euro fell on Thursday, with the greenback boosted by political uncertainty, a new round of trade tariffs and the Federal Reserve's latest policy meeting minutes that signalled a September rate rise.

While the minutes were largely as expected and initially taken as dovish by the market, analysts said dollar bulls had been looking for an excuse to pile back into the greenback after it had lost more than 2 percent from almost 14-month highs during its longest losing streak of the year.

The United States and China escalated their months-long trade war, implementing punitive 25 percent tariffs on $16 billion worth of each other's goods, rattling investors who have sought safety in the dollar. The greenback also found support after the Fed's minutes showed officials discussed raising rates soon. "I think the market has been waiting for the moment to get back in (to the dollar)," said Neil Mellor, a strategist at BNY Mellon.

The euro was down about 0.3 percent at $1.1559, easing from a two-week high of $1.1623.

The single currency was little moved by a widely-followed survey showing that the growth of euro zone businesses picked up a touch this month, although not as much as predicted.

"I'm still not fully convinced we have a sustained dollar rally here, especially after Mr Trump's comments," Mellor said, referring to President Donald Trump's criticism of the Fed's rate hikes in an interview this week with Reuters.

The Australian dollar dropped 0.8 percent to as low as $0.7283 as Prime Minister Malcolm Turnbull clung to power after several of his senior ministers called for a second leadership vote. The yen fell 0.3 percent to 110.91 on safe-haven demand for the dollar.

The Fed's minutes showed that officials had examined how global trade disputes could affect businesses and households, suggesting that the market's perceived path for monetary tightening could have to change if the trade conflict upsets the U.S. economy.

Talks between U.S. and China officials in Washington over trade will continue on Thursday, although most analysts do not expect much headway to be made, with the risks growing that the conflict descends into a growth-sapping tariff war.

The preliminary talks "look unlikely to yield too much in the way of progress as they enter a second day, with the U.S. President, given his current political difficulties, unlikely to want to concede any further ground," said CMC Markets analyst Michael Hewson.

News that two of Trump's former advisers face prison sentences has heaped political pressure on the president.

Emerging market currencies mostly fell as the dollar rallied.

The offshore yuan slid 0.4 percent to 6.8765 yuan per dollar after the latest round of tariffs took effect.

The Swiss franc gained 0.3 percent to 1.1374 francs per euro , ending its recent run of losses. The franc hit a near 13-month high of 1.1244 earlier in August.